Public Health

Why Trump’s Obamacare Promise Will Be So Hard to Keep

As a candidate back in July 2015, Donald J. Trump promised that he would repeal Obamacare and replace it with “something terrific.”

The Senate voted, 51 to 48, on Thursday morning for a measure setting Congress on the path toward repealing President Obama’s health care law, and Mr. Trump is now a few days from taking office. The public, however, knows little more about his proposal than it did in 2015.

In comments to The New York Times on Tuesday and in his news conference on Wednesday, Mr. Trump described when a Republican health reform bill would be released — “very quickly.” But he has yet to give details about the policies it would contain.

“We’re going to have a health care that is far less expensive and far better,” he said Wednesday.

Photo

At a news conference on Wednesday, President-elect Donald Trump again promised an Obamacare replacement that is better and cheaper.Credit
Sam Hodgson for The New York Times

Mr. Trump accurately describes problems with the current health care system for Americans under 65: “You have deductibles that are so high, that after people go broke paying their premiums which are going through the roof, the health care can’t even be used by them because their deductibles bills are so high.”

Premiums for health insurance plans in the United States are high. And increasing deductibles can make needed coverage a financial stretch even for the insured. Recent polling from the nonpartisan Kaiser Family Foundation suggests that the public agrees with Mr. Trump’s assessment: High out-of-pocket spending on health care is Americans’ No. 1 health care concern. (Mr. Trump has promised that he will not make major changes to Medicare, the program for Americans 65 and older.)

But solving those problems is not as easy as identifying them. The real reason health care premiums and deductibles are so high is that medical care is very expensive in the United States — far more costly than it is anywhere else in the world. The United States pays very high prices to doctors and hospitals and drug and device makers, and Americans use a lot of that expensive medical care. That means that the country spent far more on health care than its peers even when tens of millions of Americans lacked health coverage.

Obamacare has been successful in getting health insurance to people who lacked it before. About 20 million more Americans had insurance last year than before the law passed, according to an Obama administration estimate. But the health law, largely focused on health insurance regulation, did not drive down the cost of medical treatments. Health care, and health insurance, continues to be expensive.

That means that a Republican health reform plan that is both cheaper and better than Obamacare will be hard to deliver.

Republicans in Congress and right-leaning think tanks have put together a number of possible Obamacare replacement plans. They are all slightly different, and it is unclear which one Mr. Trump and congressional leaders will choose. But none of them solve both sides of the “less expensive and far better” equation.

An error has occurred. Please try again later.

You are already subscribed to this email.

Most of the G.O.P. plans manage to be less expensive for the federal government — by offering stingier federal payments in helping people buy insurance and allowing the coverage people buy to be skimpier. But those proposals will tend to increase, not decrease, the amount many Americans spend on their health care.

Lower-income people will end up paying a larger share of their income to buy coverage than they do under Obamacare. Deductibles and other forms of out-of-pocket spending, capped under Obamacare, will tend to rise in many plans. Millions to tens of millions fewer Americans will have coverage under such plans, according to independent estimates.

Republicans also want to pare back the minimum package of benefits that plans must cover, which will drive up costs substantially for some patients, while reducing them for others. If the bill eliminates requirements to pay for maternity care or prescription drugs, for example, that could lower the sticker price of a health plan, but will make health care much more expensive for anyone who has a baby or takes medication.

There will be people who will be better off under a Republican plan. Higher-income, healthy people who buy their own insurance have been the most disadvantaged group under Obamacare, and their fortunes would improve. The Republican plans, with their skimpier benefits, and more generous tax assistance for the wealthy, would offer them a better deal.

The G.O.P. plans tend to be worse for people who need insurance and are poor or have major health problems. (Some sick people may be far worse off. Mr. Trump has promised that people with pre-existing health conditions will be covered under his plan, but not all the Republican plans offer them the kind of coverage that they can get under Obamacare.)

The Affordable Care Act is a case study in these trade-offs. Most of the things its creators did to try to make health insurance “far better,” like requiring minimum benefits or banning lifetime coverage limits, also made it more expensive. The things they did to make insurance “less expensive,” like encouraging higher deductibles or requiring all Americans to buy health insurance or pay a fine, are top anti-Obamacare talking points.

The consensus Democratic approach to making Obamacare “far better” has been to make it more expensive for the federal government, but less expensive for individuals. Proposals circulated by President Obama and Hillary Clinton would involve more federal spending on subsidies to help make insurance more affordable for more people, but at the expense of higher taxes.

So far, the Republican plans have tended to engage in the same trade-offs, but tilt in the opposite direction, emphasizing government savings over program generosity.

The recent statements from Mr. Trump suggest that the coming replacement plan — promised in the next few weeks — will be able to achieve both goals simultaneously. Mr. Trump has provided almost no detail about what will be in it.